The balance sheet consists mostly of bonds the central bank purchased in its efforts to stimulate the economy during and after the financial crisis. It currently totals $ 4.15 trillion, down from $ 4.51 trillion where it stood before it started allowing a capped level of proceeds from the bond holdings to run off each month.

Mnuchin reportedly approached the fixed income dealers and investors to ask them if the Fed accelerating the pace of the balance sheet runoff could accomplish its goal of tightening policy to prevent the economy from overheating. The runoff pace is currently at $ 50 billion a month.

The report said that the people to whom Mnuchin spoke — members of a Treasury advisory committee that makes recommendations on the pace of government debt sales — were split on the idea.

Fed Chairman Jerome Powell and other policymakers have said frequently that they consider the fed funds rate, which determines the overnight rate that banks charge each other for short-term loans, still the best tool for setting monetary policy. The rate is currently targeted in a range of 2 percent to 2.25 percent and is used as a benchmark for most forms of consumer debt.

Powell is set to deliver an important policy speech Wednesday afternoon at the Economic Club of New York. The Fed is widely expected to approve another quarter-point hike at its December meeting, but is at odds with market expectations for what happens in 2019.